With a consumer base of 33.5 million people, Canada has long been one of the United States' top export markets, ranking number one for agricultural exports in 2008. Last year, U.S. agricultural exports to Canada reached $16.2 billion, and those numbers are expected to rise in spite of the global economic downturn. The United States produces more than 64 percent of Canada's imported manufactured food products due to tariff-free trading and cultural similarities in consumer tastes and preferences.

Since January of 1998, the North American Free Trade Agreement (NAFTA) has played a major role in the trade patterns between Canada and the United States, gradually eliminating all Canadian import duties on commercial and food products coming from the U.S. American products have an advantage over products from other countries required to pay tariffs and duties. As a result, the U.S. and Canada have one of the most expansive bilateral trading relationships in the world.

Since the 1990s, Canada's demographics have been shifting, and consumer tastes and trends are changing, thanks to a large immigrant population, among other factors. A steady increase in demand for healthy food alternatives now has consumers seeking healthier food products, including exotic fruits, vegetables, and ethnic foods. When making food and beverage choices, many prefer healthy food products from the U.S. The incorporation of high volumes of American products into the Canadian market has made consumers familiar with U.S. products, which have higher standards on regulations and quality control.

In addition, easy and convenient products are also still in high demand in the Canadian market. Prepared foods such as ready-to-eat meals, microwavable foods, chilled foods, sauces and condiments are popular, since the country's own production of these products falls far below consumer demand.

Canadian grocery stores have been increasing in size, with larger sections dedicated to organic foods and products. Organic products now make up nearly 2 percent of the food market. Consumers that are interested in buying organic products are also often concerned with the sodium, trans fat, cholesterol, and saturated fat content. Canadians born during the baby boom are eating more fruits, vegetables, and products labeled as "light." In response to recent changes to nutritional labels, diet-related health claims on product packaging and foods labeled "organic" or "natural" are now regulated.

Although both countries have similar consumer trends and demands, Canada and the U.S. differ on which pesticides, additives, and other contaminants are allowed to enter the country. For example, some chemicals used in the production of agriculture in the United States are not registered in Canada. Therefore, any foods containing these unregistered chemicals may face import barriers due to Canada's Food and Drug Regulations. Other regulations, such as sizing and packaging requirements for meat products like bacon and other sliced meats, vary from the standard sizes in the U.S.

More details on Canadian import regulations can be found in the Foreign Agricultural Service's Canada Exporter Guide Annual 2009 GAIN Report, online at www.fas.usda.gov under Market and Trade Data. To learn more about upcoming SUSTA activities in Canada, visit www.susta.org/events.

~By Lia Threat, SUSTA Intern

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